COL Stock Picks: Model Portfolio (January 2013)
The good thing is that more and more Filipinos are now looking at stocks as a viable investment instrument. The goal is, of course, to have more Filipino citizens who are financially literate, because that is key to developing the financial markets that could help drive the country’s economic growth.
Of course, there is still much work to be done since only less than 1% of the Philippine population are currently invested in stocks (as seen in the Infographic on the Profile of the Filipino Stock Market Investor).
The bad thing, though, with this current trend of Filipinos joining the stocks bandwagon is that a lot do so without understanding how exactly the stock market works.
Philippine stocks may be headed for a correction soon
For one, many newbie investors believe stocks investing can consistently provide positive returns. The bull run we have seen in the past months may lure newbie investors into thinking that stock prices just go up and up. This is a wrong assumption. Stocks fall and have corrections and, at times, dip to unprecedented lows that could wipe out gains in an instant. If you wish to know more what happened during bear periods in stock markets, refer to our posts below in 2008 where stock market losses were but a normal occurence:
- Philippine stock market lost 9% in January 2008
- Global stock markets down 30-40%
- Markets are down… is it time to buy, hold, or sell fund investments?
Everyone’s a genius in a bullish stock market
The bull run also tend to produce fake stock gurus and experts who believe their streak of luck will continue indefinitely. If you believe in the “efficient market hypothesis,” you know that no one can beat the market consistently. Even if you do not agree with that theory, be reminded by an old but wise stock investing mantra: “Everyone’s a genius in a bullish stock market.”
This means that during periods of all-time highs and bullish outlook, if you invest even in a randomly selected stock, it is possible for you to book profits.
Our suggestion then: Do not be fooled by your winning streak.
The key to real stock investing success is to know how the market really works, that is, understanding the rationale why stock prices rise and decline and formulating an appropriate entry and exit strategy.
Tips and Guides to Stock Market Trading and Investing
Fortunately for us, there are various references and guides that can help us succeed in stocks.
The Philippine Stock Exchange (PSE), for example, has distributed a concise but comprehensive primer on Stocks Investing in the Philippines.
Here at PinoyMoneyTalk, we also try to provide objective and easy-to-understand Guide and Tutorial on Trading Stocks.
Stockbrokers also offer regular insightful reports, one of which is the Top Stock Picks report, which identify the best stocks to invest in and the target prices that guide investors at what price to buy and sell those stocks.
Be warned, though, that these reports are mere guides and not absolute truths. They represent expectations and opinions of the broker and, as such, may be inaccurate or absolutely wrong. We suggest that you read and understand the disclaimer at the end of this post before making a decision based on Top Stocks reports.
PSE Top Stock Picks
We have already written about the January 2013 Top Stock Picks report of Maybank ATR Kim Eng.
We now share to you the Stock Picks and Model Portfolio of online broker CitisecOnline (COL). This report is from their COLing the Shots document that is freely available online to the public at no charge.
About the Broker
CitisecOnline is an online stock brokerage in the Philippines incorporated in 1999. It is primarily engaged in the business of brokerage of securities and online stock brokerage services through their trading platform www.citiseconline.com and investment program Easy Investment Program or COL EIP.
COL’s Top Stock Picks (as of January 11, 2013)
The following is COL’s Top 10 Stock Picks included in their model portfolio or basket of stocks that can supposedly generate above-average returns. The target price, buy-below price, and expected upside returns of each recommended stock are summarized below.
|Company||Stock Code||Target Price (PHP)||Jan. 29, 2013 Price (PHP)||% Expected Increase / Upside||Buy Below Price|
|4||BANCO DE ORO||BDO||95.00||76.60||24.02%||82.60|
|6||SM PRIME HOLDINGS||SMPH||21.00||17.20||22.09%||18.26|
|7||ALLIANCE GLOBAL INC.||AGI||20.57||18.90||8.84%||17.82|
|9||METRO PACIFIC INVESTMENTS||MPI||5.50||5.02||9.56%||4.78|
The data and content presented above are for information purposes only and are not intended as a solicitation to buy or sell the securities mentioned. They are also not meant to provide personal investment advice to readers of this article. Investing in stocks is risky and loss of capital is a possibility. Past performance is not and cannot be a guarantee of future returns.
Read and understand how the stock market works before investing your money. Do not be fooled by your short-term winning streaks. Remember: everyone’s a genius in a bullish stock market.
You must read these other interesting articles:
- Tutorial on Stocks and Stock Trading
- Best PSE index stocks of 2012
- PSEi stock performance in 2012
- 2012 Returns of Philippine Mutual Funds